NRF Report Finds Organized Retail Crime Growing

  • Jun 05, 2012

A recent NRF survey shows retailers think organized crime is becoming more troublesome than ever before. According to NRF's annual Organized Retail Crime Survey, 96 percent of the 125 retail companies surveyed say their company has been the victim of organized retail crime in the past year. That's up from 94.5 percent last year. In addition, 87.7 percent say organized retail crime has grown over the past three years in the United States.

"What this tells us is that as retailers and law enforcement become more aware of and more proactive in pursuing organized retail crime gangs, criminals have become more desperate and brazen in their efforts, stopping at nothing to get their hands on large quantities of merchandise,” said Rich Mellor, NRF Vice President of Loss Prevention. “Selling this stolen merchandise is a growing criminal enterprise and retailers must remain vigilant as this is an issue that involves everyone's cooperation when it comes to protecting retailer's assets, including their valued store associates and customers."

However, this year more companies believe law enforcement is aware of an understands the severity and complexity of the issue (40 percent in 2012 vs. 32.3 percent in 2011). More than half (54.4 percent) say top management at their company is aware of the problems associated with organized retail crime. 

Increase in violence and cargo theft pose problems for retailers

Cargo theft continues to grow at an alarming rate, posing huge problems for retailers and their distribution centers. On average, 52.1 percent of companies say they have been a victim of cargo theft in the past 12 months, up from 49.6 percent last year. A significantly higher percent of companies this year said cargo theft occurs mostly en route from the distribution center to the store (68.1 percent vs. 57.4 percent last year). Four in 10 (43.5 percent) say these incidents also occur en route from manufacturer to distribution center and 15.9 percent say they happen at the distribution center.

The survey also indicates a growing trend in the level of violence retailers see when organized criminal gangs are apprehended (15 percent of incidents vs. 13 percent in 2011). Retailers grappling with these violent acts also report that they believe more ORC offenders are engaged in drug activity. Nearly half (49 percent) of respondents estimate drugs and drug activity are linked to organized retail crime incidents.

When asked what new trends in organized retail crime they have noticed in the past year, retailers cited familiar issues involving the economy, returned stolen merchandise, gift card fraud, and increases in violent activity upon apprehension. However, new to the list of trends this year were specific references to 1.) digital receipt fraud; 2.) increased smash and grab incidents; and 3.) collusion with street gangs.

“Though retailers continue to make great strides in their fight against organized retail crime, sophisticated criminals with unending opportunities and anonymous outlets to sell their stolen merchandise are proving to be quite challenging for both retailers and law enforcement agencies working to combat this issue,” said NRF Senior Asset Protection Advisor Joe LaRocca. “With the types of organized retail crimes changing in severity and scope every day, and cargo theft and violent instances becoming more troubling, retailers are constantly on high alert.”

Baltimore and Orange County, CA, added to top 10 cities for organized retail crime

Organized retail crime gangs still wreak the most havoc in the same parts of the country, but a few new additions give credence to the growing problem retailers are reporting in this year’s survey. The top 10 locations in the United States that retailers say have the most criminal activity are (in alphabetical order):

• Atlanta
• Baltimore/Washington DC
• Chicago
• Dallas
• Houston, TX
• Los Angeles/Orange County, CA
• New York
• Miami
• Phoenix, AZ
• San Francisco/Oakland, CA

Federal legislation still needed to combat growing problem

For years, retailers and other vested parties have worked together to tackle organized retail crime. These partnerships include regional groups and associations who host meetings to share intelligence and work with local, state and federal law enforcement agencies. Even with the success of these partnerships organized retail crime remains a Federal issue because it crosses state lines. NRF strongly believes that organized retail crime must be addressed through Federal legislation, by amending the Federal Criminal Code to effectively address the organized and serious nature of this issue and, be properly defined as a federal crime with appropriate sentencing guidelines as well as providing Federal law enforcement the resources needed to combat this crime.

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